The executives at Facebook may be under a grand delusion: they seem to think that Facebook is a nation. And they’re attempting to build it a government.
This is, of course, a tremendously stupid idea.
Sure, Facebook has had PR trainwrecks before, and all were exercises in hubris; first there was the Beacon debacle, then its parochial ban on breastfeeding photos, and most recently, the new terms of service that tried to claim ownership over users’ data.

The executives at Facebook may be under a grand delusion: they seem to think that Facebook is a nation. And they’re attempting to build it a government.

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This is, of course, a tremendously stupid idea.

Sure, Facebook has had PR trainwrecks before, and all were exercises in hubris; first there was the Beacon debacle, then its parochial ban on breastfeeding photos, and most recently, the new terms of service that tried to claim ownership over users’ data.

That last catastrophe generated more antipathy from users than perhaps any one before it. But Facebook’s high-minded reaction will surely dwarf any of its past gaffes–and unlike those earlier ones, this one has the potential to truly damage usership. Facebook calls it “a new approach to site governance” that gives users “an unprecedented role in determining the future policies.” What it really is: a deeply flawed 21st century political experiment. Prepare to sit back and watch it burn.

Here’s the milieu: Facebook announced this week that it would craft Principles of Service and a Statement of Rights and Responsibilities meant to protect its users from abuse of their data. The social network also went one step further: It announced that it will hold “virtual Town Hall meetings” where users will get to comment on the Principles and the Statement of Rights. After the comments are digested by Facebook policymakers, they’ll take the finalized documents and put them to a public vote. All users (as of 2/25/09) are eligible to vote, and quorum will be set at 30% of users.

Here’s where things get weird. Facebook has stipulated that this voting process will become a matter of course any time Facebook wants to change its service terms. “[A]ll future policy changes would be eligible for a vote by users, provided the level of intensity of user interest would justify it,” the company’s press release says.

Weirder still: Facebook wants to establish a provisional government. Check out this paragraph tucked into the end of that same press release:

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Facebook also announced its intention to establish a user council to participate more closely in the development and discussion of policies and practices. As a start, the company indicated that it would invite the authors of the most insightful and constructive comments on the draft documents to serve as founding members of the group. [Emphasis mine.]

Not coincidentally, all of these initiatives are couched in the language of colonial nation-building. In a blog post on February 17, CEO Mark Zuckerberg observed, “More than 175 million people use Facebook. If it were a country, it
would be the sixth most populated country in the world.” He went on to call Facebook’s new terms a “governing
document” for how the service is used, and in a press conference, made reference to “openness and transparency” in much the same way that once-candidate Barack Obama promised the same things of his administration’s technology policy.

Outside critics have used similar diction. Simon Davies, director of Privacy International, called the new initiative an unprecedented action toward “democratization.” Julius Harper, a Facebook user that co-founded a group called “People Against the New Terms of Service,” said that to use votes to determine the way “service is governed” is “remarkable.”

So let’s get this straight–Facebook wants to choose a small representative government, and put all major service changes to popular vote. But wait a second: don’t governing bodies need accountability to function correctly? Wasn’t a lack of accountability and representation the reason colonial Americans rose up against the governors installed by King George III?

I bring up the American Revolution whimsically, but the parallels are interesting to talk about. Facebook, like any country, is possessed of resources that are worth money–advertising money. And as of this week, in accordance with Facebook’s new Statement of Rights, each user “owns” their little plot on Facebook’s servers: their profile. Yet the governing body, Facebook Inc., makes millions in revenues off that natural resource, while the users don’t make a dime. If Facebook is the sixth-biggest nation on earth, it’s a little like mid-century Mexico under the PRI: lots of oil money flowing upwards, and nothing trickling down.

So true accountability may be the next step. In a press conference, Zuckerberg referred to transparency as a “process” that the company will work to pursue. That suggests that more things about Facebook’s “governance” are going to change. Rafe Needleman of CNET, for one, has speculated that ultimately Facebook’s council members might be elected positions. But true accountability could be problematic for Facebook execs. What if the elected council made a campaign for profit-sharing, backed by hundreds of millions of Facebook users threatening to defect to MySpace?

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So maybe the council shouldn’t be elected. But at heart, governments have two jobs: to protect an economy, and to get people to believe in the legitimacy of the government. It’s that second part that is most difficult: if people don’t think their voices are being heard, they revolt.

If the council is hand picked, users might feel like Facebook is engaging in nepotism, and they might continue to be wary of every move the company makes. That kind of defensive posture can be hellish for a company trying to grow and change. But if Facebook lets users elect a council, they’ll not only face uncomfortable initiatives like a push for profit-sharing–they’ll open the door to the messy process of politicking. Parties will form, bribes will be made, extortion will crop up, and Facebook will become a little online banana republic.

Of course, long before any of this happens, Facebook will be forced to shutter its “open” government, because the bureaucracy of the whole thing will be an anchor on innovation. After all, Facebook still needs its agility if it’s going to solidify itself as a profitable Web company. And once they shut it down, they’re back to square one: a hegemony that no one likes.